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5 Stocks Under $10 Set to Soar

Another under-$10 stock that looks poised for higher prices is
Magnum Hunter Resources(MHR - Get Report), an independent oil and gas company engaged in the exploration for and the exploitation, acquisition, development and production of crude oil, natural gas and natural gas liquids, primarily in the states of West Virginia, Ohio, Texas, Kentucky and North Dakota and in Saskatchewan, Canada. This stock is off to a slow start in 2012, with shares down by over 18%.

If you take a look at the chart for Magnum Hunter Resources, you'll notice that back in early May, this stock plunged from $6.45 to its June low of $3.55 a share with heavy volume. During that slide lower, shares of MHR were consistently making lower highs and lower lows, which is bearish technical price action. After hitting that $3.55 low, shares of MHR went on to enter a range bound trend, with shares moving between $3.42 on the downside and $4.48 on the upside. A move outside of that range will now likely setup the next major trend for MHR.

Traders should now look for long-biased trades in MHR if this stock can manage to break out above some near-term
overhead resistance levels at $4.37 to $4.48 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.4 million shares. If that breakout triggers soon, then look for MHR to re-test and possibly take out its 200-day
moving average of $5.15 a share. If that 200-day gets taken out with volume, then MHR could re-test that May high of $6.45 a share. Traders can look to buy MHR off weakness and simply use a stop that sits close to its 50-day moving average of $3.91 a share. One could also buy off strength once MHR takes out those resistance levels, and then simply use a stop at around $4.20 to $4.06 a share.